April 15, 2009

The Future is Green – A Panel Discussion on the Emerging and Regulatory Landscape in the U.S. and the E.U.

This is a panel, moderated by Thomas C. Regan of LeClairRyan in Newark, and with Christopher Bell of Sidley Austin LLP and Rod Freeman, of Lovells LLP in London. It occurred to me that no defense lawyer (including the publisher of CalBizLit) ever went broke raising dire alarms about litigation to come. But I have some doubts about the extent to which the litigation threats described by this panel are real.

The panel began with a good summary of the current European regulatory structure for chemicals and other products. First and foremost is the development and expansion of the precautionary principle – that when there is doubt about whether or not there is risk, the risk will be avoided. This began in the environmental movement, but has now been extended to product regulation generally (e.g., General Product Safety Directive).

And proposed changes to Europe's Energy Using Products (EUP) Directive would extend the CE marking regime to Eco-Design for energy-using products. Products can’t be marketed in much of Europe without the CE mark, so the issue of green manufacturing becomes increasingly important.

Next, there was a discussion of American lawsuits on public nuisance theories, alleging that the emission of greenhouse gases causes a public nuisance. The targets so far have been coal-fired power plants, oil and automobiles. These cases, to date are at the motion stage. There is one case in New York, one in San Francisco (although involving alleged damages to a village in Alaska). One case in Federal Court in North Carolina has been successful at the trial court stage, involving emissions that took part in another case.

EPA is poised to issue a Clean Air Act “endangerment finding” that greenhouse gases are pollutants that endanger public health or welfare. There is also a clean air act amendment under discussion in the House with a citizen suit provision. A potential plaintiff would be one who has suffered “or reasonably expected to suffer a harm attributable, in whole or in part, to a violation or failure to act.”

New claimed toxicological effects are being debated in the U.S. and EU regulatory community before they hit the courtrooms: endocrine disruption, adverse impacts at the genetic level, nuanced developmental effects. By the time this gets to the courtroom, there will be a large peer-reviewed body of evidence, and an up-hill battle for the defense.

California, in addition to Proposition 65, has been "bringing the EU to the state. If it can’t be marketed in Europe, it can’t be marketed in California." And California has “issued mandatory data call in to many carbon nanotube manufacturers and importers.”